T. Boone Pickens founded BP Capital. A self-made man, Pickens has been at the helm of his self-titled investment firm for 45 years. Starting his career with Mesa Petroleum, Pickens later acquired a taste for acquisitions. Due to his savvy management of mergers and acquisitions, Pickens gained celebrity status and renown from the 1980s onward. It was the Gulf Oil takeover that gave him the Times Magazine cover in 1985. Large positions in Exxon Mobil Corporation (NYSE:XOM) and Occidental Petroleum Corporation (NYSE:OXY) have led to huge returns over 40% for Capital Commodity, Pickens’ fund as of 2007.
In this article, I will take a look at T. Boone Pickens’ latest significant picks. Obviously, all of his latest picks are from the energy sector. These are Pioneer Natural Resources (NYSE:PXD), Tesoro Corporation (NYSE:TSO), and Occidental Petroleum Corporation (NYSE:OXY).
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BP Holdings in Pioneer Natural Resources
Pioneer Natural Resources (NYSE:PXD) is an oil and gas exploration and production company. Since 2012, BP Capital has been a holder of Pioneer Natural Resources. Since then, the company has been a favorite of the hedge fund. During Q1, BP increased its holdings in Pioneer Natural Resources (NYSE:PXD) from 6.44% to 12.81% of the portfolio. This change ranked Pioneer at first place in Pickens’ portfolio.
Are investments safe?
Pioneer Natural Resources (NYSE:PXD) is the third-largest driller in the United States. Its three liquids and resource-rich core assets in Spraberry vertical, the Eagle Ford Shale, and the horizontal Wolfcamp Shale are the key drivers of its profitability. Recently, Pioneer Natural Resources (NYSE:PXD) announced its first-quarter results with 10% growth in oil production.
Its 900,000-acre leasehold position in the Spraberry/Wolfcamp can produce more than 4.6 billion barrels oil equivalent (BBOE). Additionally, the company is ramping up its appraisal activity of Wolfcamp, Spraberry Shales, and Jo Mill across its northern acreage. Pioneer Natural Resources (NYSE:PXD)’s profitability should substantially increase as these plays are developed.
With this solid investment strategy, Pioneer is expecting to increase its EPS growth 27% over the next year. This solid profitability momentum enables the stock to follow upward momentum. Over the past year alone, the stock has been able to gain 59% with few shortfalls. This means, Pickens has already gained around 59% on its investment in Pioneer.